This invention relates to water heaters and, more particularly, to instantaneous small capacity water heaters which are adapted to serve closely adjacent appliances that consume or dispense hot water. Small capacity, rapid response water heaters that are positioned closely adjacent the unit to be served are economical in that they are well insulated and are not subject to heat loss through long reaches of copper tubing prior to delivery to the appliance or hot water dispenser as contrasted to large capacity water heaters which are intended to serve a number of locations from a single station. Existing instantaneous heaters are constructed of stainless or porcelain steel which are either subject to corrosion or are expensive. In either case the water heaters are not particularly attractive.